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Thailand would no longer be imposing a withholding tax on crypto transactions. The announcement came as the planned taxation scheme received heavy opposition from industry participants.
Thailand has abandoned plans to levy a 15 percent withholding tax on crypto transactions, according to a report by the Financial Times. However, tax officials said that income earned from crypto trading or mining will still be reported as capital gains on their income taxes.
Crypto traders are also allowed to offset their annual losses against gains made in that same year. This was revealed in a manual published by the Thai revenue department and is in line with the demands from industry participants.
With the spectacular growth of the country’s crypto sector last year, the Revenue Department previously planned to strengthen its surveillance of crypto trading. However, industry stakeholders warned that excessive taxation could affect the sector’s potential growth.
The recent announcement was welcomed by industry participants. “The revenue department did a lot of homework and reached out to crypto operators as well to get feedback,”Pete Peeradej Tanruangporn, chief executive of crypto exchange Upbit and co-chair of the Thailand Digital Asset Operators Trade Association, said. “It is much more friendly to both investors and the industry.”
Last week, the Finance Ministry, the Securities and Exchange Commission, and the Bank of Thailand announced plans of coming up with new regulatory guidelines that will restrict crypto payments. They explained that while they support the development of new financial technologies such as blockchain, using crypto to pay for goods and services “would not add much benefit to consumers and businesses.”
As expected, crypto proponents criticized the move. “Restricting crypto payments is unnecessary,” David Carlisle, director of policy and public affairs of the digital asset research and analysis group Elliptic, said. “With appropriate safeguards in place, merchants can accept crypto payments without posing excessive and broad risks that cause harm.”
